We hate to be a Debbie Downer, but Mayor Eric Garcetti's claim today that a two-day, Jay Z-curated concert on the streets of downtown would "inject millions of dollars into the Los Angeles economy" is dubious at best.

It appears that most of the revenue from the $155, 2-day passes for the event is going to concert promoter Live Nation. While venues normally make money via rent, and control the profitable concessions, the Made in America fest has as its main sponsor Budweiser. That suggests Budweiser, not the city, will benefit from concertgoers' thirst.

Economists have consistently debunked the idea that one-off events result in net economic gains for metropolitan regions like L.A. One reason is that people spending money downtown will not be spending that money closer to wherever they came from, which is often not that far:

Another reason, says Robert A. Baade, professor of economics and business at Lake Forest College near Chicago, is that the costs of such events are almost always downplayed by city boosters. Those costs include people missing work because of traffic or street closures, and retailers closing up shop - as they have, for example, during championship team celebrations - to avoid a rush of drunk party-goers.

"The problem with these kinds of analysis has to do with the fact that the benefits are exaggerated and the costs are underestimated or ignored," Baade says today.

In a look at Lakers championships in the early '00s, Baade told us he found that "the parade down Figueroa essentially kept a lot of people out of work for at least a half-day and disrupted commercial activity in an important commercial corridor."

 

L.A. city Councilman Jose Huizar, who represents the area around Grand Park where the event will be held, has expressed those very concerns - that residents will be trapped or shut out of their own community and that local business could be disrupted.

See also: Jay Z Concert in Grand Park Sparks L.A. City Hall Beef

Today Garcetti mentioned a study claiming a $10 million economic impact following the first Made in America event in Philadephia event in 2012. But those kinds of studies, often carried out at the behest of city boosters (that study was touted by the Greater Philadelphia Tourism Marketing Corporation) are often full of it.

See also: Jay Z Grand Park Concert Is Official as Mayor Plans Announcement

In 2009 we debunked a study by the L.A. Economic Development Corporation, notorious for its boosterish reports, that claimed a $4 million economic impact from the Michael Jackson memorial at AEG's Staples Center, which cost taxpayers $3.2 million, mostly for extra police.

"There are vested economic interests that stand to gain from these kinds of events," says Baade. "Who's coming up with these estimates and what's their motivation?"

For Jay Z's festival, taxpayers will be footing the bill, at least initially, for extra police, shutting down city streets that will be used for stages and concessions, and cleaning up the mess left by 50,000 fans.

Will the city get reimbursed for all those costs? We asked the mayor's office to account for those costs today, but have yet to hear back. Given that the sole beneficiary outside of Live Nation, Jay Z and Budweiser mentioned at today's press conference was the United Way, it would appear on the surface that the mayor gave away the farm to have this concert on public grass and streets.

(We also asked the mayor's office what United Way's cut would be. We'll let you know if we get an answer.)